HANOI UNIVERSITY

FACULTY OF MANAGEMENT AND TOURISM

THE SUPPLY AND DEMAND OF TOURISM INDUSTRY

IN VIETNAM AFTER COVID-19

Teacher: Ms. Nguyễn Hữu Thị Thuỳ Dương

Student: Nguyễn Mỹ Hương ID: 1904010048

Nguyễn Thị Xuân ID: 1904050057

Trần Xuân Trường ID: 1904050054

Phạm Thị Hằng ID: 1904050012

Lê Thị Kim Phượng ID: 1904050035

Class: 2KT19, 2M19

Course: Microeconomics – TUT 10

0 Date: 10/12/2020
 ABSTRACT

Tourism is a key economic sector of a country, but it is heavily affected by the COVID-19
pandemic, which causes significant losses to the national economy including Vietnam.
These effects affect changes in the supply curve of the tourism industry and the needs of
domestic and international tourists in Vietnam, which is why the tourism industry is
making an effort to revitalize tourism after COVID-19. Based on the data obtained from
articles and reports, the aim of this report is to analyze the demand and supply curve of
tourism after COVID-19. In this report, we find that demand of tourists has increased
again while the supply has decreased significantly due to the impact of the pandemic
causing many businesses to leave the tourism market. After that, we recommended some
sollutions to improve the current situation. We hope that this report is considered as a
prototype as well as a potential material for tourism.

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 TABLE OF CONTENTS
ABSTRACT............................................................................................................................i
1. Introduction....................................................................................................................1
2. Discussion of the results..................................................................................................1
2.1. Demand..................................................................................................................................1
2.2. Supply....................................................................................................................................4
3. Recommendations...........................................................................................................6
4. Conclusion.......................................................................................................................7
REFERENCES......................................................................................................................8

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 1. Introduction
Considered the "smokeless industry", the tourism industry is one of the most important
factors contributing to a country's GDP.

However, the emergence of Coronavirus 2019 (COVID-19), an infectious disease, has a

huge impact on economic development around the world including tourism as many
countries are implementing regulations. This new disease chain blocker prevents the
spread of this pandemic. Therefore, this has a direct impact on the travel needs of people
including the Vietnamese tourism industry which is also significantly affected by the shift
in demand and supply of domestic and foreign travel. In March, Vietnam stopped
welcoming international visitors, only domestic operations remained. According to
Nguyen Thanh, the number of international visitors for the whole year 2020 is estimated
at only 3.7 million, down 80%, domestic tourists by the end of November are estimated at
49 million, down 37.6% over the same period last year.

Therefore, this study explores the impact of COVID-19 on Vietnam's tourism industry by
using supply and demand curves to detect economic changes in the tourism industry after
Covid-19 in Vietnam. Also, there are several suggestions given to revitalize tourism after
Covid-19.

2. Discussion of the results

2.1. Demand
In Vietnam, the early control of the Covid-19 epidemic allows business, production and
tourism activities to resume operations. Domestic flights are being restored gradually,
entertainment centers and attractions have been allowed to operate. After the COVID-19
epidemic, the tourism demand of Vietnamese people is shifting.

2.1.1. Demand for tourist locations after Covid-19

Demand for tourist destinations has risen on back

Currently, according to reports of localities, the number of tourists registering for tourism
services concentrates mainly in Ha Giang, Sa Pa, Quang Ninh, and other types of beach
tourism in Nha Trang, Binh Thuan, Ninh Thuan. Phu Quoc, Ba Ria - Vung Tau, and Con
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Dao recorded the highest increase in the number of visitors. A mountainous tourist
destination like Fansipan peak is becoming an attractive destination, along with other
entertainment attractions such as Ba Na Hills. Cu Chi tunnels, Ha Long Bay are still the
top tourist attractions for Vietnamese after Covid-19.

Domestic tourism has become the trend (especially forms of sea tourism, ecological)

After Covid19, the Ministry of Culture, Sports and Tourism launched the campaign
"Vietnamese to travel to Vietnam". According to Google Asia - Pacific from mid April
until now, searches for the keyword "domestic tourism" higher than 3 months. The
number of domestic flight searches increased by 85% over the same period in 2019. Sea
tourism, ecology, and package resort models were interested.

In searches related to "domestic tourism", the type of sea tourism, nature discovery is
most interested. Demand for sea tourism of Vietnamese tourists in July increased by 5
times compared to March 2020, which is followed by demand for nature tourism (56%)
for mountain resort tourism and ecotourism. In addition to the need to travel essential to
major cities as usual, Vietnamese people are more and more likely to go to places close to
nature and seas like Phu Quoc and Dalat for year-end holidays. Demand for self-
sufficient tourism - or travel, recovered faster than need for a package tour, doubling
compared to before the pandemic.

2.1.2. Psychology, habits when traveling after Covid-19

On May 29, Outbox Consulting Tourism Solution Research and Consultancy Company
announced the survey results "The intention of traveling for Vietnamese guests, COVID-
19".

Psychology
According to the survey results, 71% of surveyed guests said they are planning their trips
this year. This shows that the demand of Vietnamese people for tourism is rapidly
increasing. Also, the survey results show that 38% people fear that the disease will break
out again, 21% worry about health safety when traveling. In fact, these two psychological
factors do not significantly reduce the tourism demand, but only affect the choice of the

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tourism model. People will like this kind of resort with family such as resorts, hot
springs, natural and ecological tourism,...

Habits

❖ Travel near home, short-term and save money

With the form of near and short-term travel, guests can travel by family car, private
vehicle instead of going by plane. Typically, on the occasion of the holidays from April
30 to May 1, many families choose to stay 3 days 2 nights or 2 days 1 night at resorts
around Hanoi, it only takes about 2 hours to drive.

Short-term travel (1-3 days) is a trend because after taking many days off, children go
back to school, until mid-July 2020, they can take a break. So, the weekend is a good
choice for family.

In addition, traveling near also helps to save costs. During the epidemic, many people
only received a basic salary, half a month's salary or salary and bonus cut. Money has
gradually decreased, but psychology still likes to go out, forcing visitors to choose a
destination that is more suitable, with low price or with a discount policy.

❖ Take in small groups, families

Mr. Nguyen Tien Dat, Director of travel agency AZA, commented that Covid-19 makes
tourism needs change. Instead of following a large group of people as before, guests will
go free & easy in small groups of family or close friends. Traveling in small groups such
matching policy to guarantee health and safety, prevention, and reducing fear of
uncontrollable disease origins.

Instead of priorities in terms of price, the customer will be given priority on safety, pay
more attention to the safety of health, hygiene, travel insurance, avoid crowding and
choose more options for high-quality travel products (demand for upscale vacations in
open spaces). Travel plans also built close to the trip timing so it can be changed more
flexibly than before.

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 2.2. Supply
Covid-19 has affected the tourism industry, particularly not only its demands, but also its
supplies. According to Mr. Pham Hong Long (“Phat trien thi truong du lich sau COVID-
19: Biến thách thức thành cơ hội, 18 th October 2020), Vietnam has stopped all activities
about air transportation and immigration, the effects and damage of tourism are much
greater. It is the main reason that the number of tours to foreign countries was stopped
and canceled. However, the figure of the supply of domestic tours also decreased
significantly.

For example, about Mr. Nguyen Xuan Binh’s opinion (''Phát triển thị trường du lịch sau
COVID-19: Biến thách thức thành cơ hội, 18th October 2020), the supply of tourism
industry seemed “zero” in Da nang city. From 28 th July in 2020, because of the
government guide about suspending all means of transportation to and from Danang city,
398 travel business units, 16 tourist destinations, 955/1080 accommodation
establishments, 350 transport units, and 27 cruise ships stopped operating. As a result, in
Da nang city, 250 and 260 hotels/apartments/villas stopped operating and sold their
hotels, apartments and villas to others (“Phát triển thị trường du lịch sau COVID-19: Biến
thách thức thành cơ hội, 18th October 2020).

However, not only in Da Nan, but also in other cities such as Hanoi and Ho Chi Minh
city were affected a lot. Besides, in Hanoi, 764 companies about tourism stopped
operating (“Chịu cú “đánh thép” mang tên Covid-19, doanh nghiệp du lịch kêu cứu”,
10th August 2020). Also, according to Ms. Vo Thi Anh Hoa’s viewpoint in this
magazine, in Ho Chi Minh city, 90% business has stopped operating. Therefore, overall,
after Covid-19, the supply of tourism industry in Vietnam decreased significantly.

Tourism is still an industry that suffers heavy losses after the epidemic because foreign
tourists are "frozen", many airlines have not yet recovered. To stimulate domestic tourism
demand, businesses and travel companies have had to launch many incentive programs
with deep discounts.

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Discount but not service quality

The preferential rates chosen by travel companies not only stimulate domestic tourism
but also help customers enjoy 5-star quality service at hotels, restaurants, or yachts,
which was previously only available to rich tourists.

For instance, Heritage Cruises cruises overnight on Ha Long Bay of Lux Group
previously only served Western guests with prices from 10 million VND/room/night or
more. After the translation, the company changed the segment of customers to domestic
customers with a preferential price of 2.5 million VND/room/night including dining.

Incentives through cost cutting

To increase customer incentives without affecting service quality, Metropole's

management has cost-cutting such as electricity and water, saving small things like
printing and paper.

This is how Mr. Khanh (Director of H&K Hospitality) applies to H&K Hospitality
projects later. Mr. Khanh made a review to cut costs to the lowest possible level without
affecting customers.

Previously, customers at hotels run by H&K Hospitality were foreigners of diverse

nationalities, the menu was also plentiful with kimchi, cheese, butter, etc. However, in
recent years, customer segment moved to domestic market, Khanh's hotel has switched to
serving local dishes such as pho, Quang noodle, and so on.

Aviation and tourism shake hands to stimulate domestic tourism demand

Travel and aviation companies are bustling building domestic tours with cheap
"collapsed" to stimulate customer demand after the translation. Airlines such as Vietnam
Airlines, Vietjet, Jetstar Pacific, and Bamboo Airways continuously offer cheap fares
such as 18,000 - 99,000 VND / ticket. Vietnam Airlines even recently opened 5 new
5
domestic routes from Ho Chi Minh City - Tuy Hoa, Hai Phong - Nha Trang, Vinh - Da
Lat, etc to meet the travel needs of passengers, stimulating tourism. after translation ...

Travel agencies have offered tours, combos, domestic travel products at super
promotional prices. Saigontourist launched a tour package for 2 guests, from Ho Chi
Minh City to Ho Tram (Ba Ria - Vung Tau) within 2 days, it cost more than 3.6 million
VND/person, in case 4 guests cost more than 2.6 million VND/person. In which, the 3-4
day vacation package at some 5-star hotels and resorts is reduced by 20-50% compared to
the normal price, such as the resort package at FLC Quy Nhon or Muong Thanh Holiday
Dalat. price from 2.7 million VND/person.
3. Recommendations

Based on the above analysis, the following suggestions are made to restore the tourism
industry after the Covid-19 epidemic and regain growth momentum for the tourism
industry in the coming time.

Firstly, the stimulus for domestic tourism services should be given first priority. For
example, the program on “Vietnamese people travel to Vietnam” was launched by the
Ministry of Culture, Sports and Tourism to stimulate domestic tourism demand from June
1 to December 31, 2020. Because this is the stimulus period, businesses have to accept
sacrifices and receive more losses. In detail, the price is reduced but the service is
unchanged or the price is unchanged, but there is an additional service. These solutions
have been planned, which can be shown by Tourism in Da Nang when Da Nang proposes
100% exemption of entrance fee at some relics such as Cham Museum of Sculpture, Da
Nang Museum, and so on.

Secondly, because people are concerned about their health, so measures should be taken
to reassure tourists through strengthening health measures such as allocating resources to
ensure hygiene for transport services and providing medical certificates.

Thirdly, besides, the State can support businesses to remove difficulties for the tourism
industry. For example, it can be the electricity price reductions of tourist accommodation

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establishments, or extension of tax payment time and tax exemption for tourism
businesses.

Lastly, building branding and advertising strategy also are focused to promote trade,
investment, tourism, diplomatic activities domestically and internationally. Vietnam
needs to promote communication on the victory of COVID-19. According to Craig (cited
in “Them nhieu giai phap phuc hoi kinh te hau COVID-19”, 2020), he said that “The
world needs to know this message, it needs to position Vietnam as a safe paradise"

4. Conclusion
In conclusion, we found that after covid 19, people's travel demand has increased; and the
supply of the tourism industry has decreased. Based on these findings, we give some
recommendations to revitalize the tourism industry on domestic and foreign travel. These
suggestions are that some programs are planned such as exemption of entrance fee.
Furthermore, tourist sites need to ensure health safety for tourists, build branding and
advertise strategy. Effective support between business and state also is given, which
would accelerate progress to revitalize the tourism industry.

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 REFERENCES
Mr. Pham Hong Long’s opinion, Mr. Nguyen Xuan Binh’s opinion, “Phát triển thị trường
du lịch sau COVID-19: Biến thách thức thành cơ hội, 18th October, 2020). Retrieved
from: http://baochinhphu.vn/Du-lich/Phat-trien-thi-truong-du-lich-sau-COVID19-Bien-
thach-thuc-thanh-co-hoi/411052.vgp
Ms. Vo Thi Anh Hoa’s opinion, “Chịu cú “đánh thép” mang tên Covid-19, doanh nghiệp
du lịch kêu cứu”, 10th August, 2020. Retrieved from: http://tuyengiao.vn/kinh-te/chiu-cu-
danh-kep-mang-ten-covid-19-doanh-nghiep-du-lich-keu-cuu-129173
Mr. Khanh (Director of H&K Hospitality). Retrieved from: https://dulich.tuoitre.vn/hang-
khong-du-lich-bat-tay-phat-dong-kich-cau-du-lich-noi-dia-2020051610472832.htm

http://www.baoquangninh.com.vn/du-lich/202006/nhu-cau-du-lich-hau-covid-19-co-su-
thay-doi-nhu-the-nao-2486555

Nguyen Pham Huyen (2020). Kich ban thi truong du lich Viet Nam hau Covid 19.
https://vnexpress.net/kich-ban-thi-truong-du-lich-viet-nam-hau-covid-19-4190038.html

Gia Nguyen (2020). Xu huong du lich tai Chau Au Thai Binh duong va Viet nam hau dai
dich COVID 19. https://www.techtimes.vn/xu-huong-du-li%cc%a3ch-ta%cc%a3i-chau-
a-thai-binh-duong-va-vie%cc%a3t-nam-hau-dai-dich-covid-19/

Ministry of Culture, Sports and Tourism to stimulate domestic tourism demand from June
1 to December 31, 2020. Retriced from :https://thoibaonganhang.vn/giai-phap-manh-de-
kich-cau-du-lich-103038.html

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Craig (cited in “Them nhieu giai phap phuc hoi kinh te hau COVID-19”, 2020). Retriced
from: https://www.binhthuan.gov.vn/4/469/65223/573299/tin-tuc-du-lich/no-luc-khoi-
phuc-lai-nganh-du-lich-sau-anh-huong-boi-dich-covid-19.aspx

http://baoquangnam.vn/thoi-su-kinh-te/no-luc-phuc-hoi-kinh-te-sau-dich-covid-19-
93197.html

Nhat Nam (2020) http://baochinhphu.vn/Phuc-hoi-nen-kinh-te/Them-nhieu-giai-phap-

phuc-hoi-du-lich-quoc-te-hau-COVID19/396255.vgp